but... doesn't the number of men affect unit stats like atk/def?
Each guy is counted seperately for attack defence, etc. A 4group with attack16, def20, and hp40 really has 4 guys, each with: att4, def5, and 10hp. And thus 4 "seperate" attacks are calculated each time the group attacks (and the effects of 4 hits/misses are summed). As of earlier versions, the 4man squad always had 4man even with just 1 hp remaining (showing one guy on the image) for combat purposes. Later patches might have fixed this, I don't know right offhand, I have to start a new game (from start) using the new 1.09 patch to verify for sure this last thing.
I don't know how the defence works in this case. For example, if the 4 man squad of the above example is attacked with defence 20 or defence 5? 5 would make sense to me (regardless of how much damage the squad has), since you're really attacking an individual guy in the squad, but who knows? the manual provides absolutely no info & I've only been able to learn the above from various posts on this forum.